Understanding the links between smallholder farmers and retailers of meat and vegetables in Mthatha, Mqanduli, Port St Johns and Tsolo, Eastern Cape, South Africa

It is commonly accepted that one of the challenges faced by smallholder farmers is lack of ‘access to markets’. This is especially so against the backdrop of the supermarket revolution, which is widely understood to give advantage to large-scale farmers at the expense of smallholder farmers. Given that supermarkets are now well established even within South Africa’s former homelands, it would seem that even smallholders based in these areas are at a disadvantage. The purpose of this study is to delve deeply into the market access of smallholder farmers, and to do so specifically across a large area of the former Transkei where supermarkets are well established and where there are also a range of other types of retailers. The study seeks to understand the links between smallholder farmers and diverse kinds of food retailers of meat and vegetables in and around the towns of Mthatha, Mqanduli, Port St Johns and Tsolo in the Eastern Cape Province, South Africa. For each of these sites, the study estimates the share of purchased fresh vegetables and meat that ultimately originates from smallholder farmers within the former Transkei, as opposed to large-scale farmers further afield. The findings suggest that smallholder farmers account for about 24% to 40% of fresh vegetables, and 3% to 13% of meat. The difference between vegetables and meat seems to relate to the fact that smallholder farmers account for a reasonably large share of the fresh vegetables sold by at least some supermarkets, whereas smallholder livestock farmers are largely unable to sell to abattoirs, whether because of the standards imposed by these abattoirs (including the one in Mthatha), or because of the cost of transport. The differences between sites appear to be a function of several factors, including differential market size and resource endowments. The study further sought to identify the advantages and disadvantages that the different types of retailers experience in procuring from smallholder farmers, and also identify the advantages and disadvantages that smallholder farmers experience in supplying different types of retailers. The advantage of working with smallholder farmers is that smallholder farmers can even deliver on Sundays, unlike other suppliers that refuse to work during weekends. The disadvantage is that smallholder farmers are not producing consistently therefore it is hard to rely on smallholder farmers for supply of produce. The advantage that smallholder farmers experience in supplying different types of retailers is that they get their cash right away after delivering the produce. The challenge that smallholder farmers experience when supplying food retailers is that some of the supermarkets will see the sample and order large quantity, however on the day of delivery they will complain and say it is not the good quality so the farmers must reduce the selling price. The study suggests the strategy that could be used by farmers to access the market, which is to enhance knowledge of market skills and negotiation skills